Loyalty Programs for Local Businesses – Understanding the True Value
If you’re a growth-oriented local business owner, or you’re just getting your ducks in a row for a new and exciting local venture in 2023, then customer loyalty needs to be at the top of your to-do-list.
Not only do loyalty programs benefit your local customers, but they can also have a big impact on the bottom-line revenue of your business.
In this article, we'll dive into the benefits of implementing a loyalty program into your local establishment, and give you some ideas on how to get started. So, grab a coffee, sit back, and let's chat about why local businesses should consider jumping on the loyalty program bandwagon.
A customer loyalty program is a great way to keep your customers coming back to your local business time and time again. By offering customized rewards, discounts, and special VIP perks to your most loyal customers, local businesses can show their appreciation and incentivize customers to choose your café, nail salon, wellness retreat, or any other type of business over your competition.
This can be especially effective in a local town or community, where word-of-mouth recommendations are highly effective and the key to a successful venture.
Increase customer lifetime value
Customer lifetime value means the total worth to a business of a customer over the whole period of their relationship. So whereas new customers are never a bad thing, when it comes to creating a successful local business, retention to increase this value is statistically the key component to long-term success. Repeat customers have been measured to spend an average of 67% more than new customers.
If, like many local businesses, you’re tired of seeing your customers walk out the door, never to return again, it’s time to shake things up. Take it from us: a loyalty program will do wonders for your local business. Not only will it keep your current customers coming back for more, but it may also attract new ones who catch wind of the great benefits and rewards to be had.
Improve customer experience
So we’ve established that a loyalty program helps bring in repeat customers, but it can also significantly improve the overall customer experience. Think about it: your most loyal supporters are being rewarded, such as receiving a little gift, for simply shopping at their favourite local store - it instantly creates a feel-good experience.
A customer focused loyalty program helps to build a stronger emotional connection between your business and patrons. And when you have a good relationship with your customers, you can easily approach them for marketing and feedback without the fear of your customers rejecting or being disinterested in what you’re offering.
Essentially, there are endless upsides and minimal costs (and effort for that matter) when it comes to implementing a loyalty program in your local business.
Customer loyalty programs are an effective, proven way to encourage referrals. In fact, the latest Nielsen data shows that a whopping 92% of customers trust referrals from people that they know. So, taking care of your existing customers can lead to one of the most powerful referrals that your business can receive – word-of-mouth.
Not only do loyalty programs reward customers for their loyalty and repeat business, but you can also actually incentivize customers to spread the word about your business to their friends and family. For example, offering an extra stamp or point when they refer someone, or even something more generous: a free upgrade or other reward that is a minimal cost to you.
In turn, you can reward your loudest and proudest promoters with exclusive discounts or perks just for referring their friends, family, or colleagues to your business. It's a win-win situation - the customer gets rewarded for their referral and your business gets a new customer. Plus, who doesn't love feeling like a VIP and being recognized for their loyalty?!
Boost brand loyalty and recognition
Loyalty programs can be a great way for local businesses to boost brand loyalty and recognition. When you offer rewards, discounts, and other perks to your loyal customers, it creates a sense of exclusivity, appreciation, and (above all) that keeps them coming back time and time again.
Loyalty programs also help to promote brand recognition by encouraging customers to engage with your business through email newsletters, social media, or in-store promotions. They interact with you via your loyalty program, so your brand will naturally stand out against the competitors via another engagement channel.
Regular communication, be that via email, SMS or push notifications, helps to keep your business top of mind for customers and can even drive word-of-mouth marketing, which, as we mentioned above – matters!
Utilize customer data
Understanding customer behaviour and purchase patterns can help local businesses to make informed decisions about what is working and what is not. By collecting basic customer data that outlines purchases, preferences, and behaviors, a loyalty program can provide valuable insights into what your customers are looking for and how exactly they engage with your business.
Armed with this information, local businesses can tailor their offerings to better meet the needs and preferences of your customer base, resulting in a more personalized and satisfying experience for your customers.
In addition to providing greater insights, local businesses can also identify new (likely never thought of) opportunities for cross-selling and up-selling, allowing you to make the most of each customer interaction and drive increased sales and revenue for your business.
Enhance your marketing efforts
Incorporating a customer loyalty program into your local business is an under-utilized way to gain key insights into what motivates your customers to spend with your business. By tracking purchases and interactions with your business, you can learn more about what motivates their buying patterns, and what types of products or services that keep them coming back.
Using this information, a local business can incorporate them into their general marketing efforts. With these insights at hand, businesses can better target their campaigns and ultimately reduce your paid marketing costs through expensive social and pay-per-click channels.
For example, simple insights such as the most popular day of the week to collect stamps or redeeming a reward for particular customer segments (such as age) can help you to tailor special in-store offers and promotions to the right target market.
Bottom line growth – more revenue
Above all, implementing a customer loyalty program for your local business is an effective way to drive bottom line growth. Let’s face it, no one wants a revolving door of new customers that you never see again. With a loyalty program, local businesses can reward and incentivize repeat customers, create a direct line of communication, and ensure that they are enticing customers back through their door.
Implementing a loyalty program with Stamp Me is flexible and cost-effective. Our team can have you up and running quickly so that you can start learning about, nurturing, and retaining your most important customers.
So go ahead and implement a customer loyalty program for your local business - your customers (and your bottom line) will thank you!
Stamp Me provides loyalty solutions to businesses large and small, from our own Stamp Me Loyalty App to fully customised loyalty and rewards programs for enterprises and brands.
Contact us if you would like to discuss a loyalty or rewards solution for your business or brand.